Lapdog Ben Bernanke Channels Sarah Palin

Fed Chairman Ben Bernanke released the following two paragraph statement after Congress’s passage of the $700 billion Paulson Bill.

I applaud the action taken by the Congress. It demonstrates the government’s commitment to do what it takes to support and strengthen our economy. The legislation is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses.

The Federal Reserve will continue to work closely with the Treasury as it undertakes these new initiatives. We will continue to use all of the powers at our disposal to mitigate credit market disruptions and to foster a strong, vibrant economy.

Is Bernake channeling Sarah Palin type nonsense commentary? Last I looked (and I just looked a minute ago), it is the Fed that is charged with ensuring an uninterrupted flow of credit to households and businesses. From the Fed web site:

Beyond influencing the level of prices and the level of output in the near term, the Federal Reserve can contribute to financial stability and better economic performance by acting to contain financial disruptions and preventing their spread outside the financial sector. Modern financial systems are highly complex and interdependent and may be vulnerable to wide-scale systemic disruptions, such as those that can occur during a plunge in stock prices.

The Federal Reserve can enhance the financial system’s resilience to such shocks through its regulatory policies toward banking institutions and payment systems. If a threatening disturbance develops, the Federal Reserve can also cushion the impact on financial markets and the economy by aggressively and visibly providing liquidity through open market operations or discount window lending.

The initial link in the chain between monetary policy and the economy is the market for balances held at the Federal Reserve Banks. Depository institutions have accounts at their Reserve Banks, and they actively trade balances held in these accounts in the federal funds market at an interest rate known as the federal funds rate. The Federal Reserve exercises considerable control over the federal funds rate through its inf luence over the supply of and demand for balances at the Reserve Banks.

A change in the federal funds rate [i.e. a change in the flow of credit], or even a change in expectations about the future level of the federal funds rate, can set off a chain of events that will affect other short-term interest rates, longer-term interest rates, the foreign exchange value of the dollar, and stock prices. In turn, changes in these variables will affect households’ and businesses’ spending decisions, thereby affecting growth in aggregate demand and the economy.

When you stop Fed money printing, as Bernanke has done over the last four months, you are going to interrupt the flow of credit to households and businesses. Given the current fractional reserve banking system, if the Fed starts printing money again the credit markets will expand again.

Bernanke is clearly under some sort of "Paulson spell" causing him to be nothing more than Paulson's lapdog, which is resulting in some of the most bizarre financial government maneuvering this nation has ever seen.